8 Things You Could Be Outsourcing

Entrepreneurs of today must face sometimes drastic choices in order to keep their small business alive and thriving. In many cases, business may turn to outsourcing particular areas in their company. Business outsourcing is one of the best ways to help with cash flow and money management.

As a small business owner, you obviously have many responsibilities to your company. If you hire employees, that responsibility covers them as well. While you probably want to avoid choosing outsourcing in favor of downsizing, there are many practical benefits of outsourcing certain portions of your business activities.

When you are thinking about business outsourcing, the main issue to consider is whether outsourcing not only saves you money, but puts your small business in a better position in the competitive playing field.

Benefits of Outsourcing

Business outsourcing can provide many benefits. A few of the most important ones are:

Lower Your Labor Costs – While you may want to be able to hire more workers to help solve the unemployment problem, you simply may not have enough full or even part time work available. Rather than hiring piecemeal, you can keep your labor costs lower by outsourcing many of the in-house tasks noted below.

Reduces Capital Expenditure – In order to keep business activities in-house, it may require expensive capital outlay. Small business outsourcing of certain functions can help you reduce your total capital expenditure budget, including costs for software, equipment, bigger office space, etc.

Better Efficiency – It takes a village. And running that village can create inefficiencies when trying to form and refine processes. Outsourcing helps you gear up for better efficiency.

Focus on Your Business – Outsourcing provides you with less on your plate so you can do more of what it is you are best at – running your business.

Business Outsourcing Options

So what should you outsource? Essentially anything that you don’t want to do, are not great at doing, or don’t have the capital to do in-house. Here are 8 of the most common small business outsourcing functions.

Distribution

You don’t need your own fleet of trucks to get your products to retail stores. Outsourcing distribution is one of the most common tasks that any size of business will choose.

There are many distributors in all states and regions, and likely you will have a choice. Be sure you pick a distributor who ultimately gets your product to more stores and brings more money to your bottom line.

Labor

As mentioned, small business outsourcing of your labor can be a good idea, especially if you don’t have full-time capacity for specific jobs. That may include on-and-off assembly, overhead jobs like accounting and filing, and even seasonal employees.

HR

Managing your own human resources can be time-consuming and confusing if you are not familiar with labor laws, especially if you have numerous employees. Outsourcing this function can free up your time and provide your employees with the necessary support for their HR needs.

Janitorial

Most small business owners and their employees don’t want to be bothered with tasks such as emptying the garbage, cleaning out the fridge, vacuuming, or especially bathroom cleanup duty. These types of functions can easily be outsourced. Most communities have a choice of private janitorial and cleaning services available.

Security

If you have security needs that require 24 hour surveillance, or even just regular checks during off-hours, consider outsourcing that security duty to a local company. These outfits do their own background checking of their employees, and they provide quality service that you likely could not afford or coordinate on your own.

Accounting/Bookkeeping

In many small businesses, bookkeeping is easily outsourced. Independent contractors with bookkeeping training, experience, and even CPA certification are a better choice than trying to maneuver through accounting laws yourself.

Social Media

You can easily find someone experienced in social media marketing to take charge of your needs. This can be done remotely anywhere so you are not limited to finding someone in your local community.

Copywriting

Your marketing material, email newsletters, and even product documentation should be done by a professional copywriter. There are plenty of freelance writers available in the US, and since this function can also be performed remotely, you have a wider choice of writers to choose from who match your requirements and budget.

Managing cash flow can also be unecessarily time consuming. Managing A/P, A/R, and doc management (routing, approvals, doc collaboration and storage) can be time intensive. I recommend checking out Bill.com – great way to streamline. Check out their “Zen” service for added time savings.

Indeed, outsourcing (or perhaps more accurately working with specialists) is beneficial. Perhaps it does help cash flow, and avoids taking on specialist staff. But many wouldn’t employ the staff in the first place and would use DIY approach (or no action). I think the big benefit is often in access to specialists. However, there are a couple of challenges here! How to select the specialist (when the business owner isn’t an expert and may not know what to look for) and how to work with these people. Delegating can be much harder when working with an outsider. My own experience is it takes effort to define what’s needed and to develop an effective relationship – often harder than with an employee. Does that mean don’t do it? Not at all, but this strategy needs effort.
First question is how to find appropriate experts, and avoid the temptation of working with ‘friends’ rather than do homework and research. This is where careful planning comes in – specifying goals etc, and also knowing your own work style etc. If you’ve never hired an outside specialist when in a corporate role, might be good to find someone who can guide you though this process.